By Steven Tavares
State Sen. Ellen Corbett's bill to end the practice of hospital providers transferring funds out of local healthcare districts while also stopping them for purchasing a facility for next to nothing at taxpayers expense was passed Tuesday night by the assembly. The bill now heads to the governor's desk for consideration.
Much of the impetus for SB 1240 stems from the controversy between the Eden Township Healthcare District and Sutter Health regarding the future of San Leandro Hospital. “I have seen first hand how hard a community will fight to save its hospital and how difficult that fight can be,” Corbett said Tuesday.
While the fight to save San Leandro Hospital hit a fever pitch in the summer of 2009, news that Sutter Health could purchase the facility without any money changing hands, garnered incredulous responses from many local activists and residents. Through losses said to have been incurred at the hospital along with deductions for equity spent on improvements to the facility, Sutter claimed the purchase price was zero. "To keep the hospital open, the district in 2008 gave away quite a bit to Sutter," said the Director of Alameda Health Services Alex Briscoe last year, "For all intents and purposes--legally--the hospital is in the hands of Sutter."
Corbett's bill, first put up for consideration before the senate in April, would put an end to such a scenario along with stopping Sutter's controversial use of "equity transfers" they say allows the non-profit to help under performing hospitals in its Northern California network. The healthcare district in Marin sued Sutter last week for $120 million to recoup profits from Marin General Hospital before operation of the facility was returned to the district. In addition, over $50 million in equity transfers have been funneled away from Eden Medical Center in Castro Valley and San Leandro Hospital since 2004 (both hospitals operate under the same license).
If signed into law, SB 1240 would go in effect Jan. 1, 2011.